What a country? Coast to coast protests and riots, 40 million Americans unemployed over the last 10 weeks alone, almost $26 trillion in national debt, headed towards a $4 trillion deficit for the FY 2020 alone, threats of placing the US military in cities across the country, lock-downs due to COVID-19, bailouts of major corporations and industries, trillions in money printing to benefit Wall Street and Corporate America, and despite all of this, markets are nearing all-time highs again. This is ridiculous. This is out of control. This is a banana republic. Our US Constitution has been shredded, free-market capitalism is just a notion of the past. The path this and many other countries are on, is headed towards collapse. Global protests prior to COVID-19 and more on the way. These protests are not transitory, they are history in the making.
George Floyd can lose his life needlessly because he was allegedly attempting to use a counterfeit $20 bill, and yet we can have trillions of US dollars printed out of thin air so those closest to the source, i.e. Wall Street and Corporate America, can go out and buy assets on the cheap and consolidate their power – and not so much a word of protest. How far we have fallen. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Protests #Peace #Depression #Recession #USA #Gold #Debt #Bailouts #EndTheFed
Protests coming to a theater near you is something that we have been saying here for months. They have unfortunately, finally arrived. While we thought the catalyst would be more from the economic side of the ledger as opposed to the social side of the ledger, it appears that the recent tragic death of George Floyd, in Minneapolis, at the hands of police officers, is the trigger. Nevertheless, given the combination of COVID-19 lock-downs, economic hardships, social inequities (perceived or real), political divisiveness, and this event in Minneapolis, the stage was set for massive riots and protests to take center stage. Let us pray for a peaceful solution and resolution, but we imagine there will be more storm before their is the calm. We also expect global protests to pick up as well.
The Federal Reserve Chairman, Jay Powell, today during an interview admitted that the Fed has crossed some red lines – but he used the pandemic to justify their recent, continuing, and future actions. It is no longer behind the scenes. It is no longer, “pay no attention to the man behind the curtain.” No! It is in your face! And nobody seems to notice and nobody seems to care. The Fed is buying up everything. The federal government sanctions such actions and bails out major industries as well. Meanwhile, 40 million Americans have been laid-off over the past 10 weeks, a countless number of businesses have closed for good or are on their way there, and yet the stock market is near all-time highs once again. These actions by the Fed and the government are all but guaranteeing a prolonged economic contraction that is likely going to push us into the Greatest Depression.
President Trump this afternoon made comments in the Rose Garden in response to a number of issues. However, the main focus was on China and their recent legislation that encroaches on the autonomy of Hong Kong. Of course, as reported earlier this week, the US no longer recognizes the autonomy of Hong Kong. This point was reiterated by the President, with very little else thrown into the mix. The President informed the world publicly that should China pass this bill, that it would be met with a strong response from the United States. This does not appear to be a strong response. And to no surprise, the markets rallied on this news because they were selling off earlier in the day expecting a “strong” response – but they got a weak one instead. Yes, the President added a few other items, such as withdrawing from the World Health Organization (WHO), and mentioning some restrictions of Chinese students to US universities, amongst a couple other minor points. Yet, given this weaker response now begs the question, how will China and other major global players react to the President’s remarks? Will they feel empowered and emboldened to do more? One can only bluff so many times at the table before the other players start picking up on it, especially once they know you’re bluffing. So either play the “strong-man” role and follow through, or don’t. Because the outcomes and the stakes are too great. Peoples’ lives and livelihoods are not a game. The President also did not make comments on the protests during his remarks, nor did he take questions from the press, as was expected. There is simply a lack or leadership and this is a global problem. This weekend is going to be quite interesting to say the least as are the coming months. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Protests #USA #Riots #Depression #Recession #Debt #Bailouts #Gold #Silver #Peace
When it comes to today’s title, if having to choose, then The Kapital News would side with economic warfare. Of course we’re discussing the rising tension between the US and China. Today, China passed legislation that pertained to Hong Kong where many say it is a power grab by China to take away the autonomy of Hong Kong. Just yesterday, the United States, through Secretary of State, Mike Pompeo, announced that the US does not recognize the autonomy of Hong Kong. This was major news in itself. However, President Trump had made comments prior to the passing of the Chinese legislation, threatening China that if they should pass this bill that the United States would act in kind with strong force. Well now, the line has been crossed and the next move goes to the President – he is expected to announce his decision tomorrow, 29 May, as to how the US will respond. This is a major geopolitical event with many possible outcomes – many of which could take years to play out. Should this escalate further and quickly, the fallout could cause major ripple effects throughout the global economy that is already reeling from the effects of COVID-19, too much debt, and other flawed policies. Pay attention to these developments.
On the domestic economic front, the 2nd revision for Q1 GDP came in at -5% from an initial reading of -4.8%. The major decline in economic output is expected to severely effect Q2, where many forecasts are below -40%! This would be the worst reading since the Great Depression. On the jobless front, an additional 2.1 million Americans filed for unemployment insurance for the prior week, taking the 10-week total to around 41 million Americans – truly devastating. With respect to continuing jobless claims, this data point ticked down to 21 million. This is not surprising since the economy is “re-opening” and thus employees are being called back to work. Further, the PPP loans may also be having an effect since a condition to making these loans forgivable is for employers to bring their employees back on the payroll. And lastly, the President is having a war of words with social media giants, Facebook and Twitter. These developments are also worth paying close attention to as these media platforms play a major role in today’s society. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #USA #China #HongKong #Depression #Gold #Bailouts #Debt #Jobs
Taking a brief break from our analysis of the Great Depression and its comparisons to today’s events, we focus our discussion on the rising concerns relating to Hong Kong, China, and the US. Today, Secretary of State, Mike Pompeo, announced that the United States no longer recognizes the autonomy of Hong Kong. This is a major move and decision and will likely lead to an escalation in the “blame game” between the US and China.
As Beijing attempts to pass legislation that will limit the autonomy of Hong Kong, protesters have made their way back onto the streets in Hong Kong. Recall, that these protests were taking place prior to COVID-19 and were likely to continue regardless of this new legislative attempt. Hong Kong is a financial hub and a major gateway for mainland China. With the US decision, this puts this reality into a state of flux. These recent moves by all sides now raises the concerns of a potential conflict in the South China Sea, which is another issue unto itself, especially with the recent arms sale between the US and Taiwan.
And despite all of this, markets continue to climb higher as economies “re-open” and hopes for a vaccine make near daily headlines. As we’ve stated for months and continue to believe, these global protests are not transitory, but history in the making. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #USA #China #HongKong #Bailouts #Gold #Protests
We continue our analysis of the Great Depression and the striking similarities between the rhetoric and policies adopted then and the rhetoric and policies we are witnessing today. The government’s heavy-hand in attempting to “save” the economy and to “do something,” created the Great Depression. It is therefore, of great concern to The Kapital News that another Great Depression, if not the Greatest Depression, is now underway. History, in our opinion, is to be studied and taken seriously. Why? Because as the saying goes, those who do not understand history, are doomed to repeat its mistakes. And if we analyze what the government and the Federal Reserve have been doing over the last few months, and will continue to do for the foreseeable future, then we are repeating these mistakes of the 1920s and 1930s, to the Nth degree. Perhaps, “this time will be different,” but we think not. The only difference is likely to be that this time will unfortunately be worse. However, when a nation lives well beyond its means for generations, then what would one expect on the other side whence the pendulum comes swinging back? Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Depression #USA #Bailouts #Debt #Gold #Congress #EndTheFed
While the historians and economists have written plenty about The Great Depression of the 1930s, the pages mainly remain blank as to how this depression will unfold. However, if history is any guide, and it’s usually one of the best, then it may be prudent to study the 1920s-1930s in greater detail.
When reading Murray Rothbard’s, “A History of Money and Banking in the United States,” Rothbard paints a vivid picture of the players, the policies, and the outcomes that existed during this historic time. What is quite an eerie feeling as one reads his pages when covering The Great Depression, is how similar the policies of the late 1920s-1930s coincide with today’s policies from both the government and the Federal Reserve. Whether it’s central bankers standing at the ready to do whatever it takes and willing to expand the money supply, to Congress and The White House, strongly supporting public programs – the only thing(s) that change are the names and the size of the facilities – and sometimes even the names do not change.
A simple exercise can be conducted where one would simply exchange millions for billions and billions for trillions to see how similar The Great Depression is to the here and now. What may be even more disconcerting is that these very policies were the cause of The Great Depression. Had the “authorities” allowed the market to self-correct then what would have been experienced was a recession, perhaps a severe one, but no depression. And this is not simply an intellectual thought experiment. Rather, look at the recession of 1920-1921 and the policies undertaken by the government and the Federal Reserve. More correctly, it would note the lack of policies and intervention. This is because only a decade earlier, the American people, as well as their elected officials, understood the prudent tenants of free-market capitalism and simply allowed for the markets to self-correct. What occurred was a recession and not a depression. But a lot changed in ten short years and books are written not of the 1920-1921 recession, but they surely are for The Great Depression. Want to understand the present and future, then know the past. We discuss this during today’s podcast.
On the economic front, the Fed’s balance sheet now stands slightly above $7 trillion – representing a week-over-week increase of some $103 billion. With respect to initial jobless claims, an additional 2.4 million Americans filed for unemployment insurance during the prior week – taking the nine-week total to around 38.5 million Americans. With a workforce population of 206 million, this would represent about 18% of the workforce. These are staggering numbers that are consistent with April’s jobs report, and also consistent with an economic depression – and more is likely to follow. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Depression #Bailouts #Debt #USA #Recession #EndTheFed #Jobs #Gold
The weeks that lie ahead are ones of historic importance for the United States. The impeachment trial of President Donald J Trump is set to commence on Tuesday, 21 January 2020. Many of the rules that are to guide the process in the US Senate are still yet to be determined. It is imperative that the Senate places the US Constitution above partisan politics. It is their duty. It is their solemn obligation to uphold and defend the Constitution. Let the truth be know and may justice be served. This is what the American people deserve and it is what the Constitution requires. This then means that the process must be open, transparent, and fair. And that relevant fact witnesses and documents need to testify and be entered into the record. If not, then the US Senate has failed and with it – the health of the Republic remains in the balance.
On a global front, worldwide protests continue with violence escalating in Lebanon. So many people around the world are at the “end of their ropes,” and have nothing left to lose – so they’re protesting. We’ve been saying two things for quite awhile regarding these protesters – they are the only leaders in the world and these protests are not transitory, but rather history in the making. This is a global sea change and the people of the world are tired of the abuse, fraud, nepotism, and corruption that has for too long reigned in their respective governments. This will get much worse before it gets better. Stay diversified, stay vigilant, and stay with The Kapital News. #Impeachment #Truth #Justice #Peace #Economy #Politics #Recession #EndTheFed
We continue our analysis of Deutsche Bank’s list of market concerns for 2020. We also briefly continue our discussion on Boeing and how they are now being sued by an Irish firm for lost revenue. We imagine that this trend of lawsuits will continue. Recall that pilots from Southwest Airlines are party to a lawsuit against Boeing as well for lost wages. FedEx reported earnings this evening and once again gave lower guidance and noted a disconnect between the stock market and the global economy. This acts as further proof that the stock market is driven by printing funny money and $1 trillion deficits, and not on fundamental economic growth. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Recession #EndTheFed #Politics #Impeachment #Debt #Congress #Republic #Truth #Justice #Peace
Reviewing a list of 20 market risks for 2020 was the focus of today’s discussion. The list of concerns was created by Deutsche Bank and much of the points are topics that The Kapital News has been discussing for quite awhile. There is much uncertainty that remains, from trade deals, to global protests, to Brexit, to Middle East tensions, to political elections, central bank policies, and much more. The year 2019 saw a big return when it came to US equity markets, (which made new all-time highs again today), this came on the back of massive amounts of liquidity provided by the Federal Reserve and other central banks, massive debt issuance by corporations and the US government, misleading trade deal headlines by President Trump and his Administration, and many others. In short, the markets were propped up by easy money and $1 trillion deficit spending. This is a far-far cry from the “greatest” economy ever in the history of the United States. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Recession #EndTheFed #Debt #Politics #Peace #Truth #Justice
Just a follow up today of this week’s events from the UK elections to the impeachment process, to the Phase 1 US/China trade deal, and to some general market news. As a lot of these hot button issues come to some semblance of a conclusion, the markets will now have to start looking elsewhere to gain some positive momentum. Where exactly is it going to find such positivity? Perhaps talks of Phase 2 will commence immediately, please, NO! Or perhaps the mega liquidity injections by the Federal Reserve from now until early January will be enough to cause a Santa Claus rally? Only time will tell, but the headwinds still outweigh the tailwinds as far as The Kapital News is concerned. Stay diversified, stay vigilant, and stay with The Kapital News. #Economy #Impeachment #Recession #EndTheFed #Trade #USA #China #Trump #Xi #HongKong #Truth #Justice #Peace #Congress #Republic
